Cantor Fitzgerald Reiterates Sell On Endo Health, Increases PT To $56


In a research note released this morning, Cantor Fitzgerald analyst Irina Rivkind reiterated a Sell rating on Endo Health Solutions (NASDAQ:ENDP) but increased her price target to $56 (from $52), following strong prescription trends in August.

Rivkind wrote, “We are also increasing growth in the generics business following recent management comments at an investor conference. Finally, we extend revenues for Opana ER to contemplate the potential for a generic settlement. Our estimates are now at the lower end of management’s revised guidance of $2.78-2.86B and $4.00-4.20. With our new $56 PT (up from $52), we still see 18% downside from the $68.25 closing price and note that ENDP could be more vulnerable if Auxilium discussions deteriorate. For these reasons, we reiterate our SELL rating, which is based on DCF analysis.”

Rivkind continued, “We see Xiaflex as a commercially challenging product, with a number of safety risks, reimbursement issues, and a REMS program that likely restricts use. We don’t think Endo would pursue a dermatology indication in cellulite, which would require significant promotional investment. With the exception of Stendra, the remainder of Auxilium’s portfolio is comprised of mature or declining products (so organic growth could be difficult, though there could be room to take price increases). Furthermore, we worry about commercial disruption in the existing business associated with sales force terminations, as well as subsequent “starved launches” of products like BEMA Buprenorphine, Aveed, Stendra, and Xiaflex label expansions. Longer- term we would expect the transaction to be somewhat disappointing, though it would still serve the purpose of creating additional EBITDA borrowing capacity for Endo to facilitate more M&A.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind has a total average return of 16.2% and a 56.1% success rate. Rivkind has a -13.2% average return when recommending ENDP, and is ranked #195 out of 3303 analysts.

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